A German law firm has started an auction to sell the unpaid settlements of 70,000 alleged file-sharers to the highest bidder. The 'debt' belongs to people who thus far failed to settle with a copyright holder, and would be worth 90 million euros if recouped entirely. This controversial move opens up room for a new group of outfits to join the "pay-up-or-else" scheme - the aggressive debt collectors.

In recent months we’ve written dozens of articles on copyright trolls and their mass-lawsuits targeted at BitTorrent users.

The aim of these cases is to get suspected copyright infringers to settle for a few thousand dollars, in what we’ve dubbed a “pay-up-or-else” scheme. These settlement proposals are the core of every single case, and none of the copyright holders intends to proceed against the accused file-sharers in court.

Although we’ve mostly covered US and UK cases here at TorrentFreak, Germany is really the home turf of these practices. This year alone millions of people have been targeted for allegedly downloading and sharing copyrighted material in Germany, and all were asked to settle their debt with cash.

Unfortunately for the copyright holders, not all of the people targeted are willing to pay up immediately, not least because they haven’t shared the file in question.

To address this problem of unpaid settlements, German law firm Urmann has decided to find a creative way to get paid. Representing an adult entertainment company, they are selling the outstanding settlement demands of 70,000 accused file-sharers to the highest bidder. The ‘lucky’ buyer can then do whatever they think is needed to extract as much money as possible from those on their newly-purchased list.

The amount the 70,000 people are in ‘debt’ for is 1286.80 euros each, so the total in outstanding settlements up for auction amounts to €90 million ($120 million).

The target audience for this unusual purchase are debt collection agencies, who will undoubtedly introduce all sorts of harassing tactics and subtle threats to get as many people as possible to pay up. Needless to say, this turns these “pay-up-or-else” practices into an even darker scheme than they already are.

One of the companies currently going after BitTorrent users in Germany is CD Projekt, the makers of The Witcher 2: Assassins of Kings. Although there is no indication that they will go as far as selling their debt to collecting agencies, being involved in the settlement business doesn’t help their image.

It will be interesting to see whether the same debt collecting practices will also be tried in other countries such as the US.